6) :(
Without the model option dell-m4-1, the built-in microphone does not work at
all.

However, the docking station's line out works fine without the model option
now.

Strange. As default, model=dell-m4-1 is chosen. It can't be a driver problem.

Perhaps you have another model setup somewhere in /etc/modprobe.d/* file or
/etc/modprobe.* files?
I remember that I saw two entries in alsa-info.sh output.

7) :(
Even with the model option dell-m4-1, input source2 does not work at all. In
Kmix (since alsamixer does not show these settings now), I ticked the record
tick box on both "Capture" and "Capture2" and put them both at 95%; and Mux
and
Mux2 at the 3rd highest setting out of 4 possible setting, but regardless
which
input source I select, only input source1 is heard. I do not recall input
source 2 to ever work, though.

(However, I test recording via Skype Test Call Service. Given 3) below, how do
I test it with a more reliable program?)

"Input Source 2" is for the secondary PCM stream. Using it is a bit tricky, so
better to forget right now. So, it's no bug, too.

3)
Also very odd: Skype is now automatically adjusting the slider "Digital
Mic"
and not "Capture" as it did before.

Maybe you are accessing "default" PCM in Skype, and I guess it's "Digital
Capture", not "Digital Mic".

I did not change the Skype settings at all, the only thing that changed was
the
ALSA driver!

Yes, and Skype choses a strange thing. I know Skype is doing very strange
things secretly that I can't know at all. It's no driver bug, as well.